Financing, Options and Taxes

The use of SAFEs in different industries or sectors, such as healthcare, fintech, or sustainability: How the unique characteristics of these industries may impact the terms of the SAFE

June 26, 2023June 26, 2023 by Yair Udi

The use of SAFEs in different industries or sectors, such as healthcare, fintech, or sustainability, has become increasingly popular as more and more startups look for alternative methods of funding. While the basic structure of SAFEs remains the same across all industries, the unique characteristics of each industry may impact the terms of the SAFE. … Read more The use of SAFEs in different industries or sectors, such as healthcare, fintech, or sustainability: How the unique characteristics of these industries may impact the terms of the SAFE

How to negotiate favorable terms for a SAFE investment?

June 5, 2023June 5, 2023 by Yair Udi

Investing in a startup can be an exciting opportunity, but it’s important to approach it with a critical eye and negotiate favorable terms to protect your investment. This is especially true when investing through a Simple Agreement for Future Equity (SAFE), a popular investment instrument used by early-stage startups. In this article, we’ll explore some … Read more How to negotiate favorable terms for a SAFE investment?

Israeli Tax Authority Releases Guidelines on Taxation of Investments via SAFE Agreements

May 18, 2023May 18, 2023 by Yair Udi

Introduction: In May 16, 2023, ~10 years after the first SAFE was signed, the Israeli Tax Authority (ITA) has issued guidelines regarding the tax implications of investing in companies through Simple Agreements for Future Equity (SAFE). The guidelines were prompted by a request from Israel Advanced Technology Industries (IATI), raising concerns for the hi-tech industry, … Read more Israeli Tax Authority Releases Guidelines on Taxation of Investments via SAFE Agreements

The Advantages and Disadvantages of Valuation Cap-Only SAFEs in a Bear Market, and Why Discounts Can Help

April 19, 2023April 13, 2023 by Yair Udi

Startups use Simple Agreements for Future Equity (SAFEs) to raise funds without the hassle of complicated valuations or equity sales. These agreements allow investors to invest money into the company in exchange for equity at a later time, usually at the time of a future financing round or exit event. One of the most common … Read more The Advantages and Disadvantages of Valuation Cap-Only SAFEs in a Bear Market, and Why Discounts Can Help

Regulatory Considerations for SAFEs: Compliance with Securities Laws and Tax Implications

May 16, 2023April 10, 2023 by Yair Udi

SAFEs (Simple Agreement for Future Equity) have become a popular form of startup financing due to their simplicity, flexibility, and low transaction costs. However, like any form of financing, SAFEs are subject to various regulatory considerations that startups and investors need to be aware of to ensure compliance with securities laws and regulations, and to … Read more Regulatory Considerations for SAFEs: Compliance with Securities Laws and Tax Implications

Using SAFEs vs. Priced Rounds: Understanding the Differences in Terms, Transaction Length, and Costs

May 3, 2023April 10, 2023 by Yair Udi

Startups looking to raise capital have several options available to them, including using a Simple Agreement for Future Equity (SAFE) or a priced round. Both SAFEs and priced rounds have their advantages and disadvantages, and startups must consider which option is best suited for their specific circumstances. In this article, we will explore the differences … Read more Using SAFEs vs. Priced Rounds: Understanding the Differences in Terms, Transaction Length, and Costs

RUSSIAN ROULETTE CLAUSE

July 16, 2023February 7, 2023 by Yair Udi

Companies bring together people with a similar vision and views on business, but it is not always easy for owners to make joint decisions. Sometimes shareholders can get stuck with different opinions. Fortunately, there are some mechanisms in company law to overcome it. These arrangements can be enshrined in companies’ statutory documents in the form … Read more RUSSIAN ROULETTE CLAUSE

MAKING A SECTION 83(B) ELECTION UNDER U.S. LAW

July 16, 2023January 25, 2023 by Yair Udi

In our previous publications, we have drawn attention to the idea of vesting of options and reverse vesting of stock, which means that the founders of a start-up can receive stocks that they do not completely own, because a company has the right to repurchase them (in reverse vesting); or employees get the right (option) … Read more MAKING A SECTION 83(B) ELECTION UNDER U.S. LAW

REVERSE VESTING: A MECHANISM THAT HELPS RETAINING FOUNDERS

July 16, 2023January 10, 2023 by Yair Udi

As we have already discussed in our previous publications, the process of raising investments to a company may require several important legal documents to be drafted and agreed upon, including an investment agreement, shareholders or investors rights agreement, bylaws and a revised articles of association or a certificate of incorporation of a company, depending on … Read more REVERSE VESTING: A MECHANISM THAT HELPS RETAINING FOUNDERS

Double Trigger on Option [Vesting] Acceleration – Meaning and Importance

July 16, 2023October 19, 2022 by Yair Udi

Share or option vesting is a retention mechanism, intended to secure the engagement of founders, employees, and advisors, over time or when hitting certain milestones. Vesting allows equity grantees to earn their share over a period of time, or when achieving certain milestones. On the other hand, vesting acceleration allows founders, employees and advisors to … Read more Double Trigger on Option [Vesting] Acceleration – Meaning and Importance

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